Demand for CSR: Insights from Shareholder Proposals

Abstract

Motivated by the increasing popularity and attention shareholder proposals on corporate social responsibility (CSR) attract, the purpose of this study is to provide a detailed portrayal of shareholders' demands for CSR through their proposals. To this end, we conduct a descriptive longitudinal study of the CSR proposals submitted to US corporations for the fiscal years 1996–2009. We use a unique coding process in which we identify both the CSR area of concern to the shareholders and the desired effect the proposal is intended to stimulate on the corporation. Our findings expose how shareholders engage with corporations mostly around the issues of governance and environment, requesting more transparency from the companies but also improved actions or business decisions. Firms from a wide range of industries are targeted, with their levels of CSR performance, profitability and size attracting different kinds of requests in terms of CSR areas and expected outcomes for the corporation. Shareholders can be relatively intense in their requests for CSR, with the majority of firms in our sample being targeted with more than one proposal annually. Our study deepens our understanding of shareholders' concerns and requests for improvements in CSR.